Debt Collectors: who are they, how did they get your account, and will they negotiate?
December 4, 2008
Many people call our office with questions about letters and calls they have received from debt collectors or debt purchasers. (Click the link for an explanation of the terms “debt collector” and “debt purchaser.”)
The consumers’ first questions are usually, “why am I getting calls from XYZ Collection about an old Discover card? Why would I take their word for it that I should send them money I supposedly owe to another company?”
These are great questions to ask. These and other frequently-asked questions are discussed below.
Proper party to pay: get it in writing
Before paying any old accounts, you want to be sure you have verified that the party asking for payment is legally entitled to payment. You will want to get this in writing before making any payments
How did the debt collector get the account in the first place?
If a consumer falls behind in his or her account payments, the account may be sold to a debt purchaser. Or, a creditor might hire a debt collection company or attorney (as an independent contractor) to do its collection work.
But, unfortunately, some collection accounts never belonged to the consumer in the first place. Our office has seen many cases where a debt collector will try to collect on a so-called Âdebt that never existed.
Do I really owe the amount the debt collector says I owe?
Even when the original debt did exist, some debt collectors try to collect amounts that are much greater than the original debt.
They do this by adding on interest, penalties, attorneyÂs fees, and court costs to the original debt amount. But, some or all of these charges might be invalid.
Our experience has been that consumers sincerely want to pay any amounts they owe. But, a consumer might not really owe the amount the debt collector claims.
Keep in mind that collection agencies, debt buyers, and the attorneys who assist them are subject to the Fair Debt Collection Practices Act as well as applicable state laws.
Will a debt collector negotiate the amount they say I owe?
It depends. If the debt collector is working as an independent contractor (doing collections for an original creditor), its ability to negotiate will usually be limited.
For example, the debt collector might be authorized to settle for a certain percentage of the amount they are seeking. Depending on the original creditor, this amount might be 35% – 85%.
When the debt collector is also a debt purchaser and has bought the debt, they may have more room to negotiate lower settlements.
For more information
For more information about the above topics, contact our office and / or take a look at the following related posts:
Debt Lawsuits: FAQ and General Information
Related Posts
Comments
Got something to say?
You must be logged in to post a comment.
Ware Law Office LLC Page
